“La vie commence lautre cot du desespoir”
Life begins on the other side of despair.
- Jean-Paul Sartre

I’ve spent the last few weeks completely immersed in the gloom and doom of the new home and mortgage industries and it already feels like months. Journalists are starting to separate their thoughts into a few different groups.

• It’s bad
• It’s bad…but it’s gonna get worse
• It’s bad…it’s getting worse…so who’s to blame?
• Somebody has to pay for this

In general, there seems to be very little reporting of personal responsibility. No reporting of individuals finding unique ways to prosper in the face of adversity. No reporting of creative new products rushing to fill the vacuum of the disintegrating sub-prime market. You get the idea. But… Just because we have not seen it yet does not mean it is not out there.

In the coming weeks as we see more builders reporting losses, mortgage companies closing, more calls for government intervention, and yes the mandatory bunch of heads on a platter, I will be looking some nuggets of creativity to help fill the void. I don’t think I will find it coming from big monolithic companies, but rather small agile entreprenuers. Companies small and flexible enough to adjust quickly to the current upheaval in the market place.

In the meantime enjoy some of this weeks more memorable articles.

Area home-building slows to a crawl
By Gary T. Pakulski

Builders from the same local market are effected in different ways by the downturn

Hangover starts after real estate bender
By Leslie Earnest

Brad Cottrell was a paramedic when a friend introduced him to the high-rolling world of high-interest mortgage lending.

Borrowers are caught in backlash over loan defaults
By Emmet Pierce

Critics say the tough new underwriting standards that were imposed to prop up the sagging subprime mortgage market are harming some creditworthy borrowers by trapping them in high-cost loans.

Largest U.S. home builder’s earnings plunge 85%
by Inman News

D.R. Horton Inc., the largest U.S. home builder, today reported an 85 percent decline in quarterly earnings as market conditions continue to challenge the nation’s home builders.

U.S. home builders risk bankruptcy in 2008, experts say
By Steven Church - Bloomberg News

WASHINGTON: The collapse of the subprime mortgage market may push some big U.S. home builders toward Chapter 11 bankruptcy protection starting next year, according to bankruptcy advisers and lawyers who specialize in the real estate industry.

Builders Highlight Need for FHA Reform

The National Association of Home Builders (NAHB) today called on Congress to enact legislation that would reform and revitalize the Federal Housing Administration’s single-family mortgage insurance programs.

Builder profits, home sales in focus
Investors gear up for glut of quarterly reports and new, existing home sales
By John Spence, MarketWatch

BOSTON (MarketWatch) — Home-builder stocks could see plenty of action next week as investors prepare for a slew of quarterly financial releases as well as reports on March new and existing home sales.
The volatile sector has traded lower so far in 2006 as more evidence suggests the important spring sales season is off to a lackluster beginning. The subprime-mortgage debacle could postpone any potential rebound as lenders tighten their standards, and home builders are taking impairment charges now that land prices in many areas are falling back after the boom years.

Today Pulte homes announced their Preliminary Results for Q1 2007. To read the article Click here.

They listed the following items as known risks of doing business in the new home industry:

• general economic and business conditions
• interest rate changes and the availability of mortgage financing
• the relative stability of debt and equity markets
• competition
• the availability and cost of land and other raw materials
• the availability and cost of insurance covering business risks
• shortages and the cost of labor
• weather related slowdowns
• slow growth initiatives and/or local building moratoria
• governmental regulation, including the interpretation of tax, labor and environmental laws
• changes in consumer confidence and preferences
• required accounting changes
• terrorist acts and other acts of war
• other factors over which there is little or no control.

As the second largest builder in the U.S. (based on permits pulled) Pulte faces many problems that may not be felt by regional or local builders. That said, look at the list above and ask yourself if you face the same challenges. More often than not, I’m betting yes.

I’d say it’s been my biggest problem all my life.. it’s money. It takes a lot of money to make these dreams come true.
- Walt Disney

It’s been another rough week for both the mortgage and new home industries. Builders are laying off staff, cutting subcontractors and reducing expenses in marketing and advertising. These reductions are just part of the story. The trickle down effect of the housing industry is being felt throughout the world economy. The United States housing industry has been a driving force in the global economy since early 2002. The recent meltdown of the sub-prime mortgage industry is causing the housing market to continue on its downward spiral and the signs keep pointing to the impact it will have on foreign investment markets.

It doesn’t look like its gonna get any better in the near future. So, What are we going to do? Survive is the obvious answer. We have to get smart. We need to look for ways to do more with less. Next week we’ll outline a few solutions that builders have come up with to better utilize their marketing dollars.

‘Bonnie and Clyde of mortgage fraud’ will call prison home

Matthew Bevan Cox — who, along with an accomplice was dubbed “The Bonnie and Clyde of mortgage fraud” — has pleaded guilty to mortgage fraud charges in three states.

No. 1 builder signals more housing blues
UNION-TRIBUNE STAFF AND NEWS SERVICES

DALLAS – The peak spring home-selling season is off to a slow start, builder D.R. Horton Inc. said yesterday, another sign that bad times in the housing market may last longer than expected.

Home prices set for first drop in 40 years
Chris Isidore, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) — The National Association of Realtors said Wednesday it expects its measure of home prices to fall this year for the first time since the group began keeping track nearly 40 years ago.

Subprime `Debacle’ Will Delay U.S. Housing Recovery (Update5)
By Kathleen M. Howley and Sharon L. Crenson

April 11 (Bloomberg) — The subprime loan “debacle” will make it more difficult for borrowers to get mortgages and will cause U.S. home prices to fall this year for the first time on record, the National Association of Realtors said.

Median Home Price Projected to Drop
By ALAN ZIBEL and DAN CATERINICCHIA

Key Senate Democrats issued a report Wednesday detailing the housing market’s decline amid calls for federal aid to homeowners at risk of foreclosure.

“The good things take care of themselves. We want to find all the negatives.” - Wayne Huizenga, Blockbuster Video

We are introducing a new segment to the URBaCS blog called the Gloom & Doom: Week in Review. On Sunday evenings we will be posting our weekly findings relating to the mortgage and housing markets and will underscore important trends and challenges that these industries face. As time progresses we hope to offer some unique insights into ways builders are overcoming these challenging conditions.

Subscribe to this blog for weekly updates.

You’ll here us mention this time and time again but we truly admire the guys at 37signals. They’ve created some fantastic small business software that manages to-do lists, projects, writeboards, and real-time conversations. We use both their Backpack and Campfire programs. I would also highly recommend frequenting their blog: Signal vs. Noise. They try to sift through a lot of the clutter of the web to bring unique insights.

The most recent posting at the time of this post is about using photos in online real estate listings, which conveniently caters directly to the vision of URBaCS. Read it here: Real estate photos worth more than a thousand words

Matt cites a recent NY Times article as well. Read it here: Making Every Pixel Count

We created a new ’searchable’ function that will allow builders to have total control over which photos are searchable and which aren’t. This allows homeowners to continue to upload their own photos, but gives the admin user the ability to block content from public view.

In testing the functionality of the searchable function we went through the 1,500 photos that we’ve uploaded thus far and I quickly realized that around 25% of our titles/descriptions had misspellings. So I did some quick searching and found a simple solution. Googiesearch was developed by Orangoo Labs and is easy to embed in any javascript enabled form. You can try it yourself: Orangoo Labs. It uses Google’s spellchecking functions and works like a charm. Maybe this can make your life easier also.

Issuing a press release is not as easy as you may think. There are many excellent websites loaded with information but most I found are trying to sell you ‘Professional Press Services.’ Last I checked our marketing budget was about $87 for the year…so this isn’t an option for us. We realize the need to market to various media outlets but we need to do so with very little out-of-pocket.

I stumbled across this site that offers links to issue free press releases: Mr. SEO

We have also created a list of the editors/press managers for each of the major publications we plan to hit and we will be emailing our releases to them as well.

I’ll let you know how it goes.

The blog is officially live. We have brought on our first couple of beta testers and will be unleashing the demo software by week’s end. We plan to update this site as new builders come online.

URBaCS is a new kind of company. A Web 2.0 company. A company that spans the collective wisdom of open-source and shared platforms but caters to one of the oldest most ’set in my way’ industries. The new home industry is run predominantly by 40-50 year old white men that don’t know how to double-click a mouse. We are aiming to change that. (Or at least show them how easy and profitable it can be.)

Current Milestones:

1. Leapfish value for URBaCS.com - $67
2. Technorati rank: 2,996,932

Welcome to the URBaCS blog. We will be updating this site as time passes so keep posted.